NEW DELHI: The government kept up its offensive against the Comptroller & Auditor General (CAG) as the prime minister stepped into the arena to launch a scathing attack on the audit report on coal blocks and said some adverse comments of the national auditor were difficult to accept in a democracy.

Singh told Parliament he took "full responsibility" for the decisions of the coal ministry, which he directly controlled during a part of the audit period, but rubbished allegations of impropriety as baseless. He said some observations of CAG were "clearly disputable", while some were based on a "selective reading" of a 2006 law ministry opinion.

The prime minister, who has been criticised by the Opposition for maintaining silence, recited an Urdu verse to reporters to say his silence was better than thousands of answers as it protected the honour of countless questions. (" Hazaron jawabon se achchi hai khamoshi meri, na jaane kitne sawalon ki aabru rakhe.")

BJP was unmoved by Singh's remarks, and scaled up its attack on the government. It said the ruling party had bagged " mota maal", or a fat sum, by allocating blocks, which CAG estimates had coal worth Rs 1.86 lakh crore. BJP demanded the prime minister's resignation and cancellation of coal block allocations, and said it remained determined to stall parliamentary proceedings.

BJP leader LK Advani criticised the PM for attacking a constitutional authority such as CAG but Finance MinisterP Chidambaram rejected this, saying at a press conference that "fair criticism" of the rulings of constitutional bodies such as the Supreme Court was legitimate.

CONGRESS PREZ LIKELY TO LAUNCH SCATHING ATTACK ON BJP

The prime minister is scheduled to leave for Iran on Tuesday to attend a summit of the Non-Aligned Movement, but Congress President Sonia Gandhi is expected to launch a scathing attack on BJP at a meeting of Congress' parliamentary party, according to an agency report.

Singh's aggressive stance triggered a flurry of press briefings, allegations and counterattacks by Cabinet ministers and BJP leaders. Chidambaram firmly rejected BJP's allegations of bribery and said there was no plan to move a vote of confidence in Parliament, although sources in the Congress party said such a proposal had been debated internally. Congress has ruled out adjourning Parliament sine die, which means bringing the session to a premature end.

CAG's observations on coal blocks and its earlier report on the telecom sector have embarrassed the UPA government and evoked strong protests from BJP, which has disrupted Parliament repeatedly. The political tumult along with the ensuing legislative deadlock and policy inaction have contributed to the slowdown in economic growth and the fall in industrial output.

Corporate India is worried the current session of Parliament would also be overshadowed by political protests. "Very disappointed and very unhappy that the government and the Opposition are fighting like school children at the cost of the nation. We want Parliament to function. Congress will say there is no 'gadbad' (wrongdoing) at all. I don't think that is correct," said Rahul Bajaj, chairman of Bajaj Auto.

But the stock markets are taking the developments in their stride. "I don't think markets are too worried about a mid-term poll on the back of CAG report. There is a bit of skepticism about the numbers arrived at by CAG in its report. And that's why I don't see too much of concern on the street," said Nischal Maheshwari, head of research at Edelweiss Securities. The CAG's office declined comment on the government's attack on its audit report, but sources in the auditing authority said CAG would respond to the issues raised by Parliament's Public Accounts Committee (PAC).

CAG reports are normally discussed in detail in the PAC, when the ministry concerned responds to the issues raised. After that, the committee sends its report to the Speaker and Parliament discusses the report. The prime minister said he wanted to "depart from this established procedure because of the nature of the allegations that are being made and because I was holding the charge of coal minister for a part of the time covered by the report".

Singh said he disagreed with CAG's view that competitive bidding could have been introduced in 2006. "This premise of CAG is flawed," he said. He said the UPA government had conceived the idea of allocating coal blocks by competitive bidding in June 2004.

CAG had argued that the process of allocating blocks as per the recommendations of a screening committee was opaque, bidding could have been introduced in 2006, and the delay in launching the bidding system helped private companies gain Rs 1.86 lakh crore. "The observations of CAG are clearly disputable," he said.